Japan's Advantage adds renewables strategy

The new business is expected to deliver investment and co-investment opportunities for existing funds. However, it is an entirely separate platform from the firm’s other business lines and operated by a different team, according to a source close to the situation. The plan is to raise new funds and products focused on renewables and sustainability.

Advantage said in a statement that it has been considering investments in renewable energy and related areas for several years. It chose to act now in response to the growing importance of initiatives such as the UN sustainable development goals and the adoption of net-zero emissions by governments and corporations. This is expected to create a conducive investment environment.

In addition, the team’s expertise regarding environment, social and governance (ESG) issues will be leveraged across Advantage’s other business lines.

Keiichi Suzuki has been recruited to lead the new strategy. He previously spent nearly 30 years at Mitsubishi Corporation, making alternative investments – including in private equity, renewable energy, and infrastructure – and latterly serving as general manager of merchant banking within the asset finance division. In this role, Suzuki was responsible for approximately $1 billion in assets.

Advantage closed its sixth flagship Japan buyout fund last year at the hard cap of JPY85 billion ($790 million), up from JPY60 billion in the previous vintage. For the most part, it targets a combination of corporate carve-outs and succession planning deals.

The firm has two other business lines: a private solutions strategy – introduced in 2009 – that involves investing in public companies that have no desire to be privatized but want to work with Advantage based on its value creation proposals; and an Asia ex-Japan buyout strategy, although there is a Japan angle to most deals. The first Asia fund closed at $380 million in 2018.

In 2019, Advantage sold a minority stake in its fund management entity to Tokyo Century Corporation, a local leasing business and a longstanding LP. The move was intended to facilitate succession planning and accumulate balance sheet capital.

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